Starlink might be the latest kid on the block in Kenya’s Internet Service provision industry after less than two years since entering the space. But its recent aggressive pricing strategy over the last four weeks has jolted the market as the Musk-owned company woos with cheaper bargains and better speeds.
Kenyans are pleased with the improved deals while growing in excitement and patronage for the brand. But end-users weren’t the only ones jolted by Starlink’s aggressive price drops. Competing traditional internet service providers (ISPs) are also paying attention – some jittery.
The Aggressive Price Drop Behind Users Rave
The world’s richest man launched Starlink, a subsidiary of spacecraft corporation SpaceX, in Kenya in July last year. Its immediate competitors became local existing players like Safaricom, Telkom, Faiba, and Zuku, who use traditional fiber-optic technology.
Unlike fiber optics which are rarely available in rural areas, satellite internet has ICT links with satellites in space orbiting around the Earth that can provide high internet speed anywhere on the planet. With such promising potential, it’s easy to see why Starlink must have easily hit the ground running with the country’s regulators and users.
However, what initially put users off from the satellite internet brand was its initial high-brow hardware cost of Ksh. 74,000, a price that the average earner in the country couldn’t afford. Competing traditional ISPs like Safaricom (who owns the country’s biggest market share of 36.7%) didn’t feel ruffled or threatened by the expensive “luxury.”
But their long-term slumber since inventing PESA 15 years ago would meet its unanticipated end as Starlink began selling at retail chain stores like Carrefour and online trading platforms like Jumia. Earlier in the year, the satellite internet provider announced it would reduce the hardware costs to as low as Ksh. 39,500 only to return last month with another deal that sold the kit from Ksh. 29,000.
Beyond dropping the satellite’s price to Ksh. 29,000, the satellite ISP introduced a kit rental option in Kenya that allows customers pay a one-time activation fee of Ksh. 2,700, followed by a monthly hardware rental fee of Ksh. 1,950. Per the service plans, Starlink offers as low as Ksh. 1,300 a month for a 50 GB monthly data plan, with the same promised internet speed of up to 200Mbps.
For context, Safaricom’s 45GB monthly plan sells at Ksh. 2,500 while Airtel goes for Ksh. 3,000. Expectedly, excited customers are raving about the new deals online and offline as more people advance toward the country’s sole satellite ISP. However, on the side of the competition, some brands want the government “warned” about Starlink’s latest exploits.
Safaricom Protests about “Foreign” Starlink
Safaricom, in a stern letter to Kenya’s ISP regulator, advised that big tech players like Starlink may have failed to align with major requirements local operators are subjected to. These requirements include exorbitant license fees for spectrum, more regulatory burdens in terms of service quality, compliance with data protection laws, and oversight by Kenya’s security agencies.
Safaricom argued that the regulators should only permit Starlink to operate through existing operators, rather than allow them to directly engage with Kenyan subscribers or hawk their equipment in chain stores. The said letter and recommendations have caused massive stirs in Kenya’s social media space, especially from users who were already subscribing to Starlink’s services.
While many online are fighting on behalf of Starlink’s juicy offers, including Muranga County Governor who tweeted to “Ignore Safaricom,” the regulator is yet to respond to the letter. Safaricom remains a prominent player in Kenya’s ISP industry, with vast investments, employment opportunities, and high tax payments – a resume that the regulator couldn’t possibly “ignore.”
All eyes are now on the regulator to see how they balance the interests of one of the largest ISPs in East and Central Africa against the interest of the man who intends to conquer the Earth – and other potential planets. Meanwhile, Starlink’s operations continue in other African countries like Rwanda, Zimbabwe, and Nigeria.
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